三季度收入表现稳健，一般图书出版收入增速较好。教育出版发行方面，秋季学期课前到书任务如期完成，我们判断为三季度收入表现奠定基本盘。一般图书方面，3Q23 公司一般图书出版销售码洋15.4 亿元，同比增长9.8%，营业收入3.54 亿元，同比增长16.7%，我们认为公司精品出版战略持续见效，毛利率28.6%，同比下降4.1ppt；发行方面，根据开卷数据，前三季度图书零售市场仍为同比下降，其中包括短视频渠道在内的线上渠道表现好于线下实体店渠道，我们判断公司线上销售渠道表现相对稳健。3Q23 deducted non-return net profit is lower than we expected.
The company announced 3Q23 results: revenue 2.27 billion yuan, a year-on-year increase of 1.2%, basically in line with our expectations (2.35 billion yuan), return to the mother net profit of 136 million yuan, an increase of 20.8% over the same period last year, mainly due to increased profit from investment income, deducting non-return net profit of 50.05 million yuan, down 44.0% from the same period last year, lower than we expected (105 million yuan), mainly due to higher-than-expected sales and management expenses.
Trend of development
The third quarter income performance is steady, the general book publishing revenue growth rate is good. In terms of educational publication and distribution, the task of arriving books before class in the autumn semester was completed on schedule, and we judged that it laid the foundation for the income performance in the third quarter. In terms of general books, 3Q23's general book publishing and sales code is 1.54 billion yuan, an increase of 9.8% over the same period last year, and its operating income is 354 million yuan, an increase of 16.7% over the same period last year. We believe that the company's boutique publishing strategy continues to be effective, with a gross profit margin of 28.6%, down 4.1ppt from the same period last year. In terms of distribution, according to the open-book data, the book retail market still declined in the first three quarters compared with the same period last year, in which online channels, including short video channels, performed better than offline physical store channels, and we judged that the company's online sales channels performed relatively steadily.
The gross profit margin is stable compared with the same period last year, and the sales expenses under the industry competition increased significantly compared with the same period last year. The gross profit margin in the third quarter was 22.2%, a slight increase in 1ppt compared with the same period last year. Sales expenses and administrative expenses increased significantly compared with the same period last year, of which:
In the third quarter, sales expenses increased by 25.6% compared with the same period last year, and the cumulative year-on-year growth in the first three quarters was 14.5%. We judged that the strong competition in online book retail led to an increase in expenses such as publicity and promotion; in the third quarter, management expenses increased by 18.7% compared with the same period last year. However, the cumulative year-on-year growth in the first three quarters is only 1.2%. We judge that there may be an impact on the distribution between quarters. In addition, the investment income of 60.36 million yuan was recorded in the third quarter, which greatly increased the net profit returned to the mother.
Maintain the advantage of online and offline double cycle, and continue to promote the digital fusion format. In terms of distribution, with the help of the advantages of Boku Group, the company continues to promote the mode of bringing goods and self-broadcasting, grasping the dividend of book sales in short video channels, while its publishing houses also strengthen the construction of their own new media matrix and expand their marketing methods.
In terms of digital integration, Boku Group and digital distributor OverDrive signed a strategic cooperation at the Frankfurt Book Fair. In the future, the two sides may explore cooperation opportunities in the direction of exporting quality digital content and promoting the international dissemination of Chinese publications.
Profit forecast and valuation
Considering that the recovery of the book market is relatively limited and the company's marketing expenditure is relatively high, we have lowered our 2023 net profit forecast by 4% to 1.5 billion yuan, basically maintaining the 2024 profit forecast, and the current stock price corresponds to 11x2023pm. Maintain the outperform industry rating, taking into account the soundness of the company's education publishing and distribution business and the persistence of dividends in the past, maintain the target price of 10.5 yuan, corresponding to 16 times 2023 shock 2024 Pmax E, the target price has 36% upward space compared with the current stock price.
Risk
The growth rate of the number of primary and secondary schools in Zhejiang Province is not as expected, the recovery of the general book industry is not as expected, the policy of teaching materials and auxiliary teaching has turned, and the digital transformation is not as expected.
